Kottage Gets $470-Per-Hour Legal Help In Probe
by Melissa Bailey | Dec 6, 2013 2:01 pm
Posted to: City Hall, Legal Writes
Federal investigators are looking into any “possible conflicts of interest” between New Haven’s outgoing police and fire pension fund adviser and a company from which he took out a personal loan, based on information contained in a subpoena.
Meanwhile, the pension board has agreed to shell out a “discounted” $470 an hour for legal representation for the city’s fire union president, whom investigators have subpoenaed in the probe.
The subpoena comes from the federal Securities and Exchange Commission (SEC), which is investigating a financial consultant named Larry Gray who has advised pension funds in New Haven and Atlanta. The SEC is looking into allegations that Gray’s firm, Gray and Company, failed to disclose to Atlanta officials that he had steered $64 million in Atlanta pension money to his own hedge fund. The subpoena was released Thursday following a Freedom of Information request from the Independent.
As part of the Atlanta probe, the SEC issued a subpoena on Aug. 20 to New Haven’s Policemen and Firemen’s Pension Fund.
Click here to read it.
Meanwhile, the pension board has hired lawyers to represent pension board Chairman Jimmy Kottage, the point person in negotiations with Gray; and former pension board trustee Rick Epstein, in their testimony before the SEC. Epstein was the dissenting pension board member when the deal with Gray was struck, according to board minutes.
Epstein is being represented by the firm Brenner Saltzman & Wallman at a cost of $280 per hour for partner time and $100 per hour for paralegal time, plus costs, according to city payroll supervisor Jerry Sagnella. The firm has not yet billed for its time.
Wiggin and Dana is representing Kottage. The firm is charging $470 per hour for Jim Glasser, $425 per hour for Robert Hoff, and $290 per hour for Conor Mullan, “plus any costs.”
Those hourly rates are “discounted,” according to a letter from Jim Glasser outlining the terms of the contract. Glasser, a partner in the firm, said he usually charges $525 per hour, and Hoff usually charges $470. Click here to read the letter, dated Nov. 20.
The services will be billed monthly, according to Glasser. “If the board believes the expenses are mounting too rapidly, please contact us immediately so we can assist the board in evaluating how they might be curtailed in the future.”
The subpoena asks for, among other information, all documents concerning the pension fund’s investment in Capital Point Partners. That’s the name of the Houston-based lender from whom Gray (pictured) took out a personal loan. The loan spurred allegations of a conflict of interest, because New Haven uses Capital Point to lend out some pension fund dollars. Gray has been serving in two roles: Advising New Haven’s pension fund as to whether to use the firm to lend out pension fund dollars, while borrowing money from the same company.
The subpoena asks for all documents and communications with Gray Financial, Capital Point, and their representatives “concerning possible conflicts of interest.”
It also seeks all documents concerning the pension fund’s investment in a hedge fund Gray created and manages called GrayCo Alternative Partners I. The pension board had invested $7 million in this fund, while also retaining Gray as its consultant—a conflict of interest that ultimately led the board to end its relationship with Gray. The board voted last week to accept Gray’s resignation; he will remain the pension adviser for 30 days after the city picks a replacement.
Gray has not responded to calls seeking comment in the past two weeks.
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Whoa! What does Kottage need a high-priced lawyer for, when he hasn’t done anything wrong? (And if he has done something wrong, why are we as taxpayers on the hook for his criminal defense?)
This is very, very fishy. Shouldn’t it be the City’s office of corporate counsel handling the matter?
Also, did Larry Gray pay anyone in Connecticut any of the “finder’s fees” for steering New Haven pension funds to specific firms? Our did Gray keep all the usual commissions for himself?
More on pension funds, finder’s fees and corruptions here:
In reading all the articles on this stuff fireman union president kottage new that gray owned the funds that kottage wanted to invest in over trustee epstiens objections. Kottage said that gray told him last year about the loan from the capitol group and didnt have a issue with it. Why did gray withhold that from the whole board?why did kottage withhold it from the whole board if gray told him about it?? What else is going on that we know about yet? Now wonder he got a 470 dollar an hour lawyer.unfortunatley at our expense.
posted by: AverageTaxpayer on December 6, 2013 1:43pm
More on pension funds, finder’s fees and corruptions here:
You left out this one.The crooked 401k.
“The Retirement Gamble” Facing Us All
How Retirement Fees Cost You.
Paul, As a member of NHFF Local 825 it I feel I need to say the way the headline and story in general makes it look as Jimmy is under investigation for something shady. As the chairman of the pension board he would be the one subpoenaed for the investigation into the case involving Mr. Gray and the “pension board” is what is recieving legal advice and representation which would absolutely appropriate and necessary. Our pension fund has never been stonger and I have the upmost confidence in Jimmy, he is an honest man, a man of integrity, one with high standards and our union is better under his leadership then it has ever been. And trust me when I say it’s a thankless job. Jimmy has selflessly and passionately fought for the safety of our members and I myself trust Jimmy with every penny I put into the pension fund. Thank you and enjoy the holidays.
Sincerely, Lieutenant Gary W. Cole
Alfred Jackson, President, Founding Partner, Managing Partner, Chairman, and Member of the Investment Committee of Capital Point Partners was a $2500 donor to DeStefano’s Gubernatorial campaign.
Money was flowing from city pensions to Mayor DeStefano as well as to Larry Grey. Neither transaction should have been permitted and both should be investigated.